What did Exxon know, and when did it know it? The attorneys general for New York and Massachusetts are trying to get answers to those questions, which could exonerate Exxon — or expose the largest fraud of our generation. Other states, including Maryland, should join their efforts.
Almost four decades ago, Exxon knew that the build-up of carbon dioxide in the atmosphere could have catastrophic effects on the world's climate. The company was so confident in its climate projections that it adjusted billion-dollar infrastructure projects to account for the expected changes. Yet, in the late 1980s, instead of giving an honest assessment of its views on climate change — or even remaining silent on the topic — the company apparently embarked on what appears to be a multi-million dollar disinformation campaign to raise doubts about global warming.
This campaign succeeded spectacularly. Many Americans, including many influential lawmakers, still don't believe in global warming. As a result, the United States has delayed taking meaningful action to address climate change, and Exxon has enjoyed decades of record-breaking profits in the meantime — profits it likely could not have earned without actively corrupting the public's knowledge about climate change. If true, that's fraud.
The costs of Exxon's misdirection, if that's what it indeed was, could be staggering. More than half of all industrial carbon dioxide emissions have been released into the atmosphere since 1988. Delay has made the problem of climate change a lot harder to solve now than it was then. States owe it to their residents to hold Exxon accountable for the costs of any misrepresentations. Fighting fraud should not be a partisan issue.
As early as 1977, senior Exxon executives were warned by a company scientist that "carbon dioxide from the world's use of fossil fuels would warm the planet and eventually endanger humanity." As the producer of more carbon emissions than all but five countries, Exxon officials must have understood that excessive carbon dioxide in the atmosphere could be a big problem for the company. They took action almost immediately, conducting cutting edge research into carbon dioxide absorption and developing advanced climate models. The company relied on these climate models to protect its corporate assets. It raised the height of its offshore drilling platforms to safeguard against rising sea levels and larger waves, and it expanded its operations in the Arctic to take advantage of the thawing polar ice caps.
In the late 1980s, however, Exxon also ramped up its funding of global warming skeptics. In doing so, it may have crossed an ethical red line.
Recently uncovered corporate strategy documents reveal that Exxon was directed to "emphasize the uncertainty" in the science behind global warming. One strategy document from the 1990s declares that "victory will be achieved" when average citizens and the media "understand (recognize) uncertainties in climate science" and take them to be "conventional wisdom" despite evidence of the impact of human-caused global warming and nearly unanimous agreement about it in the scientific community.
The company took out newspaper advertisements downplaying the scientific consensus behind climate change and funded front groups that denigrated the very climate models Exxon was using to guide its investment decisions. In total, Exxon paid out more than $33 million in grants since 1998 to organizations that questioned the scientific consensus on global warming.
Exxon's apparent disinformation campaign came right out of the tobacco companies' playbook. Exxon even turned to some of the same groups that the tobacco industry had used to promote uncertainty about the dangers of smoking — this time to play up the uncertainty in climate science.
While the federal government seems unlikely to investigate Exxon's actions any time soon, the states should not let Exxon slide. The attorney general of every state is charged with both preventing consumer fraud and protecting consumer safety. Both responsibilities are in play here.
First, if the company knowingly made false statements to the public about climate change in order to sell its products, fossil fuels, that conduct was potentially fraudulent. Second, Exxon's products imperil consumer safety when produced in large quantities because global warming will cause widespread health problems.
If attorneys general don't take action, their states may be left picking up the tab. Because of climate change, state governments will have to field teams of first responders to assist victims of bigger floods and more intense wildfires. State-owned infrastructure will also be put at risk. Ports must be defended against rising sea levels, and wastewater treatment plants must be redesigned to handle bigger storms. These costs have only gotten bigger with time. If Exxon perpetuated a fraud in order to stall action on climate change so that it could continue selling a potentially dangerous product, it should be liable for its share of the costs of the delay.
Every state is affected by this potential fraud, so every state attorney general should take a seat at the table by joining the investigations into Exxon.
Douglas F. Gansler is the former president of the National Association of Attorneys General and a former two-term Maryland attorney general; his email is dgansler@BuckleySandler.com.